The Delaware Supreme Court, in two recent decisions, has clarified the application of the corporate-opportunity doctrine
Article Abstract:
The Delaware Supreme Court clarified the corporate opportunity doctrine in Broz v. Cellular Information Systems and Thorpe v. CERBCO, Inc. In Broz, the court ruled that the determination that a breach of the doctrine has occurred depended on factors including the corporation's ability to use the opportunity and intent to do so and that such a determination was fact-intensive. In Thorpe, the court ruled that the fiduciaries' action caused the company no injury because, as controlling shareholders, the fiduciaries in this case could veto any transaction of the company which whould have led to the sale of all or substantially all of its assets.
Publication Name: The National Law Journal
Subject: Law
ISSN: 0162-7325
Year: 1996
User Contributions:
Comment about this article or add new information about this topic:
Warning: rescue may raise risks; after 'Alantec,' investors must beware that the company they save may not be their own
Article Abstract:
The settlement of the case of Alantec Corp, a computer networking equipment firm,, dealt with a set of venture-capital financings which resulted in a dilution of the founders' interests. It was believed the founders had too much stock in view of the decrease in their role with the company and had essentially given away common stock to the new management so they could vote those shares for the new financings. Corporate counsel should recommend a disinterested third party be the lead investor to avoid such conflict-of-interest situations.
Publication Name: The National Law Journal
Subject: Law
ISSN: 0162-7325
Year: 1997
User Contributions:
Comment about this article or add new information about this topic:
A recent case limits an officer's exposure in selling securities before a corporation revises its earnings projection downward
Article Abstract:
A US district court in TX ruled recently that a corporation's plan to change its earnings projection is not per se material, and that only one standard of materiality applies to both insider-trading cases and fraudulent failure to disclose. Judge Lee Rosenthal in SEC v Hoover found that Howard Hoover, general counsel of Browning Ferris, properly relied on the judgment of an in-house securities counsel in deciding that a plan to lower earnings projections from 10% to 10-12% did not bar him from selling stock.
Publication Name: The National Law Journal
Subject: Law
ISSN: 0162-7325
Year: 1996
User Contributions:
Comment about this article or add new information about this topic:
- Abstracts: Developments in labor-management cooperation: the codification of cooperative mechanisms. Application of conjoint measurement procedures to collective bargaining research in school personnel administration
- Abstracts: As a result of the Delaware Chancery Court's recent decision in 'Caremark,' corporate monitoring and compliance programs may no longer be optional
- Abstracts: Court nixes spoliation as a tort; California's Supreme Court recently ruled that sanctions available in the underlying case obviate the need for a separate tort
- Abstracts: Punitive damages in arbitration: Mastrobuono and the need for creation of a national court of commercial appeals
- Abstracts: Forward-looking statements and cautionary language after the 1995 Private Securities Litigation Reform Act: a study of current practices